Negotiable Instrument Law

CBA-BSA Fourth Year Block 1

Mid-terms exams; February 2, 2106
x-----------------------------------------x

PALAWAN STATE UNIVERSITY

COLLEGE OF BUSINESS AND ACCOUNTANCY
BSA Fourth Year Block No. 1
Mid-term Examinations
NEGOTIABLE INSTRUMENT LAW
Prof.: Atty. Emilia Concepcion D. Severino
INSTRUCTIONS:

Write your name, section and date on the upper right hand corner of this
questionnaire
Multiple Choice Questions
Choose the BEST ANSWER. Encircle the corresponding letter of your
answer.
Choose your answer wisely and carefully. GOOD LUCK

1.

Y, an employee of A, represents to A that he bought from B a typewriter. On this

representation of Y, A draws a check payable to the order of B. The fact however, that
there was no purchase at all. What is the instance that will make the check payable to
bearer?
a.
If B is fictitious and non-existing person.
b.
If B is existing person has no right to the instrument because there was no really no
purchase.
c.
If B though non-existing is intended by A to receive payment.
d.
If B though existing but believed by A to be non-existing.

2.

What would be the effect of the following:

An incomplete instrument was issued by A who thereafter entrusted the same to B for
safekeeping. B wrongfully completes and negotiates it to a holder in due course.
a.
Delivery to a custodian is a sufficient delivery by the maker or drawer as to a
holder in due course.
b.
There is only a prima facie presumption of delivery as to a holder in due course.
c.
Delivery to a custodian is not delivery as contemplated by law as to hold the issuer
liable to either a holder or non-holder in due course.
d.
no rights or property will arise to the instrument because it is undelivered
instrument.

3.

4.

Which of the following instrument is negotiable?

a.
I promise to pay P P10,000.00 ten days after the death of his grandfather (Sgd.
M)
b.
Pay to the order of Superman P10,000.00 and reimburse yourself out of money in
your possession (Sgd. D, addressed to X)
c.
Ten days after passing the 2011 Bar Exams, I promise to pay P or order
P10,000.00 (Sgd. M)
d.
Pay to the order of P the amount of P 10, 000.00.
(Sgd. D, addressed to X or Y)
A makes a promissory note payable to Bs order. He keeps it in his safe but B, his nephew
steals it. B then indorses the note to C, then C to D, D to E, and E to F. F knows that B
stole the note from his uncles safe. Can F recover from the instrument? and against
whom?
a.
F can recover from A, because he is not the immediate transferee of A and is thus
considered a remote party.
b.
F although a remote party, may not recover from A because he is not a holder in
due course and has knowledge of lack of delivery of the instrument.
c.
F is a remote party not a holder in due course and hence may not recover from any
of the parties who may raise the defense of lack of delivery against him.
d.
F an immediate party and hence a holder not in due course may not recover from A
but may recover from B, C, D, and E who cannot raise against him the defense of
lack of delivery.

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Mid-terms exams; February 2, 2106
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5.

The following are the conditions to constitute a holder in due course, except:
a.
He took the instrument in good faith and for value.
b.
He has knowledge of infirmity in the instrument.
c.
He took the instrument complete and regular in its face.
d.
He became the holder of the instrument before it was overdue.

6.

What is the effect if A issued a check in favor of B or order leaving the amount thereon in
blank. The instruction of A is to write the amount of his obligation amounting to P100,000.
B wrote P1M and negotiated it to C a holder in due course.
a.
A is liable to C for P100,000 the amount he instructed B to write on the check.
b.
A is not liable to C because it was not filled up strictly with his authority.
c.
A is not liable because there is no showing that it was filled up within a reasonable
time.
d.
The amount of P1M on the instrument is conclusive as to C so as to hold A liable
thereon.

7.

The original parties in a bill of exchange are the drawer, acceptor and payee.
The original parties in a promissory note are the maker and payee.
a.
Both are true
b.
Only first statement is true
c.
Both are false
d.
Only second statement is true

8.

What
a.
b.
c.
d.

9.

The rules on liabilities of parties on a forged documents in a bill of exchange are:

Statement A: the drawers account cannot be charged by the drawee where the drawee

kind of forgery is covered by Section 23 of the Negotiable Instrument Law?

Section 23 applies only to forgery of signature
Section 23 applies both to forgery of signature and alteration of the instrument
Section 23 covers only alteration of instrument
Section 23 covers neither alteration and forgery

paid

Statement B: the drawer has no right to recover from the collecting bank
Statement C : the payee can recover from the drawer
Statement D: the payee can recover from the receipt of the payment, such as the
collecting bank
a.
b.
c.
d.
e.

All statements are true.

Both statements A and B are true.
Both statements A and C are true.
Both statements B and C are true.
All statements are false.

10.

A signature which is forged or made without the authority is wholly inoperative.

a.
Only the signature forged or made without authority is inoperative, the instrument
or other signatures which are genuine are efffective.
b.
Signature made with authority is inoperative.
c.
A signature which is not forged or made with authority is wholly inoperative.
d.
Signature forged or made with authority is wholly operative.

11.

R, debtor of S, wrote a promissory note payable to the order of S. T, Ss brother,

misrepresenting himself as Ss agent, obtained the note from R, then negotiated it to A
after forging Ss signature. A indorsed it to B, who indorsed it to F, a holder in due course.
May F recover from B?
a.

Yes, since the signature of S is immaterial, he being the payee.

b.

No, since the forgery of Ss signature results in the discharge of B.

c.

Yes, since only the forged signature is inoperative and B is bound as indorser.

d.

No, since the signature of S, the payee, was forged.

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Mid-terms exams; February 2, 2106
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12.

Which
a.
b.
c.
d.

of the following is not negotiation of a negotiable instrument?

Delivery to the payee
Delivery of a bearer instrument
Indorsement completed by delivery
Assignment

13.

Which
a.
b.
c.
d.

of the following renders the instrument non-negotiable?

An indication of a particular fund our of which reimbursement is to be made
An indication of a particular account to be debited with the amount
A statement of the transaction which gives rise to the instrument
An order or promise to pay out of a particular fund

14.

The following instruments were presented to you for evaluation:

I.
Pay to the order of A, P20,000.
II.
Pay to the order of A P20,000 or deliver to him a piano of the same value, at his
option.
III.
Pay to the order of A P20,000 or deliver to him a TV of the same value.
IV.
Pay to the order of A a piano worth P20,000.
Assuming all the other requisites of negotiability are present, which of the foregoing
instruments are not negotiable?
a. Instruments I and II
b. Instruments I and III
b.
Instruments II and III
d. Instruments III and IV

15.

The following are functions of a negotiable instrument. Choose the exception:

a.
It is a substitute for money.
b.
It increases credit circulation.
c.
It increases purchasing power in circulation.
d.
It extinguishes obligation if its delivery is accepted by the creditor.

16.

Which of the following instruments is not negotiable for the reason that the instrument is
not payable at a determinable future time?
a.
b.
c.
d.

30 days after demand, drawer A directs B to pay C or order P10,000. Sgd. A

20 days after the death of Z, I promise to pay to the order of B, P10,000. Sgd. Q
10 days after A passes the Bar exams, I promise to pay to the order of B P10,000.
Sgd. C
On or before February 14 2016, I promise to pay P or order P10,000.

17.

Which of the following is negotiable?

a.
I promise to pay B or order P20,000 if he will pass the Bar exams on 2013. (Sgd.)
A
b.
I promise to pay B or order P20,000 in four installments. (Sgd. A)
c. I promise to pay B or order P20,000, 30 days after the death of his father. (Sgd.) A
d.
I promise to pay B, P20,000. (Sgd.) A

18.

Which of the following instruments is not negotiable for the reason that the instrument is
not payable at a determinable future time?
a.
On the death of X. I promise to pay to the order of B P1,000. (Sgd) A
b.
On or before October 30, 2015, I will promise to pay B or his order P10,000. (Sgd
A)
c.
Sixty days after sight, I promise to pay to the order of B P5.000. (Sgd.) A
d.
Ten days before the death of X, I promise to pay B or his order P10,000. (Sgd. ) A

19.

A makes a note in favor of B with the understanding that it is not to become binding until it
is also signed by C. If B files an action on the note will she be able to recover from the
note?
a.
No because the instrument being subject to a condition therefore not a negotiable
instrument.
b.

Yes because only the delivery of the instrument is subject to the condition but not
the promise to pay, hence the instrument is negotiable.

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Mid-terms exams; February 2, 2106
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20.

c.

Yes because in the hands of B the presumption is conclusive because it was validly
and intentionally delivered.

d.

No because B is an immediate party and the presumption of delivery is rebuttable

and A can show that the delivery was conditional and the condition is not fulfilled.

A issued the following promissory note:

I promise to pay to the order of B P100,000 on February 25, 2016. (Sgd. A)

At the back of the note are the following indorsements:

To C:

(Sgd. B)

__________

(Sgd. C)

If the instrument is in the hands of D, how can D validly negotiate the note to E?

21.

22.

a.

by writing his name on top of the signature of C and deliver it to E

b.

by indorsing it specially to E

c.

by signing in blank

d.

by delivering the note to E

In order for an agent signing on behalf of his principal to escape liability on a negotiable
instrument it is not necessary:
a.

The agency evidencing the appointment of agent be in writing

b.

That the agent be authorized

c.

That the agent add words to his signature indicating that he signs as an agent

d.

The agent disclose his principal

A is a maker of a promissory note which is payable to bearer. B signs his name across the
face of the instrument. In the hands of C, B is:
a.

Maker

c.

Acceptor

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Mid-terms exams; February 2, 2106
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b.

23.

Indorser

d.

Drawer

In the above case, assume B places is signature in place of As signature. In the hands of
C, B is:
a.

Maker

c.

Acceptor

b.

Indorser

d.

Drawer

24.
I promise to pay X or order P 1,000.
To : Z

(Signed) Y

The instrument is:

a. A promissory note since it contains the word promise
b. A bill of exchange because it is addressed to a drawee
c. Non-negotiable because it is ambiguous and therefore does not conform to the
requisites of negotiability
d. Either a promissory note or a bill of exchange
25.

Which of the following is not a real defense and, therefore, may not be set up against a
holder in due course?
a.
incapacity as far as incapacitated person is concern
b.
acquisition of instrument for an illegal consideration
c.
want of delivery of incomplete instrument
d.
forgery

26.

Statement A: A payee may be a holder in due course.

Statement B: A drawee may be a holder in due course.
a.
b.
c.
d.

27.

Both statements are true.

Both statements are false.
Only statement A is true.
Only statement B is false.

Mahal signed a promissory note for P500, 000 as maker, and payable to bearer, delivered
to Belo in payment for Mahals scheduled medical operation that will make her tall. Later,
Mahal was informed that it is impossible to make her tall. However, Belo has already
delivered the note to Haden upon the terms of payment of P300,000 and the balance in a
month. Haden received notice of the defect. Which is true?
a. Haden can collect P500,000 because he is a holder in due course entitle to the full amount
of the instrument.
b. Haden must pay the balance before he can collect for the full amount.
c. Haden is a holder in due course to the extent of P300,000, the amount paid by him.
d. Haden cannot collect because of the failure or absence of consideration.

28.
paid

The rules on liabilities of parties on a forged signature in a bill of exchange are:

Statement A: The drawers account cannot be charged by the drawee where the drawee
Statement B: The drawer has no right to recover from collecting bank
Statement C. The payee can recover from the drawer
Statement D. The payee can recover from the receipt of the payment, such as collecting

bank
a.
b.
c.

All statements are true

Both statements A and B are true
Both statements A and C are true
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CBA-BSA Fourth Year Block 1
Mid-terms exams; February 2, 2106
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d.
e.

Both statements B and C are true

All statements are false

29.

A found a check in the street, drawn by B against CHI Bank, with C as payee. A forged Cs
signature as an indorser then indorsed it personally and delivered to MET Bank. The latter,
in turn, indorsed it to CHI Bank which charged it to Bs account. B later sued CHI Bank but
it set up the forgery as its defense. Will it the case prosper?
a.
Yes, since forgery is only a personal defense
b.
Yes, since CHI Bank is bound to know the signature of B, its client
c.
No, since Bs remedy is to run after the forger, A.
d.
No, since the payees signature has been forged

30.

The following are precluded from raising the defense of forgery except:
a. The forger as he cannot raise his own malfeasance as a defense
b. The indorsees and persons negotiating the instrument by delivery as they do not
warranted that the instrument is genuine and in all respects what it purports to be.
c. Those who are barred by estoppels or by their own negligence from raising the
defense of forgery.
d. The acceptor with respect to the signature of the drawer as he admits the existence
of the drawer, the genuineness of his signature, and his capacity and authority to
draw the instrument.

31.

If a bank pays a forged check

a.
bank is liable
b.
drawee bank bears the loss
c.
drawee bank considered as paying out of its funds
d.
b an C
e.
all of the above
Which is available against any holder?
a.
Failure or absence of consideration
b.
Complete but undelivered instrument
c.
Incomplete but delivered instrument
d.
Incomplete and undelivered instrument

32.

33.

A issued a check in the amount of P100,000 but left the name of the payee in blank
because he still wants to verify the correct spelling of said payees name. Inside As office,
B saw the check and wrote his name as payee. Thereafter B negotiated the check to C a
holder in due course. Will A be liable to C?
a.
Yes because as to C the check is valid and effectual and there is a conclusive
presumption that the instrument has been filled up strictly in accordance with the
authority given and within reasonable time.
b.
No. This is a case of incomplete and undelivered instrument.
c.
Yes because C is a remote party and in his hands a valid delivery thereof by all
parties prior to him so as to make them liable to him is conclusively presumed.
d.
No because A cannot set up against C the defense of undelivered instrument.

34.

On April 1, 2015 a bill of exchange was issued as follows:

[Date:_________________]
Pay to the order of B P100,000 30 days from date. (Sgd. A) To: X
B inserted the date March 1, 2015.
Which of the following is not true?
a.
The instrument in the hands of B will be avoided
b.
The instrument in the hands of a holder in due course will be paid 30 days from
April 1, 2015
c.
The instrument in the hands of a holder in due course will be paid 30 days from
March 1, 2015
d.
The instrument in the hands of B will paid 30 days from April 1, 2015

35.

A statement of the transaction that gave rise to the instrument

a.
renders an instrument non-negotiable
b.
does not render an instrument negotiable
c.
renders an instrument negotiable
d.
does not render the instrument non-negotiable

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CBA-BSA Fourth Year Block 1
Mid-terms exams; February 2, 2106
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36.

The holder may treat an instrument at his option, either as a bill of exchange or a
promissory note, but not in the following:
a.
where the maker is non-existent
b.
drawer and drawee are the same person
c.
where the drawee is a fictitious person
d.
where the drawee is a person not having capacity to contract

37.

An instrument is issued in this manner: Pay P or order the sum of P100,000 and charge
the same to my account or to my share of profits. Sgd. D
a.
it is not negotiable because of an implied condition
b.
this is negotiable because it is payable absolutely and not out of a particular fund
c.
it is not negotiable because it will depend upon the share of profits
d.
it is negotiable because there is no condition

38.

What kind of defense is forgery under Section 23 of the Negotiable Instrument Law?
a.
Forgery can be presumed and the burden of proof lies on the party alleging forgery.
b. Forgery is a real defense which means that it could be raised against any holder,
including a holder in due course.
c. Section 23 purports to declare neither the instrument totally void nor the genuine
signatures thereon inoperative.
d.
Forgery is a real or absolute defense except a holder in due course as provided in
Section 58.

39.

The effects of forgery of a signature are as follows except:

a. That the signature forged or made without authority is wholly inoperative
b. That no right to retain the instrument, or to give discharge thereof,
c. to enforce payment thereof
d. When the party against whom it is sought to enforce such party is precluded from
setting up the forgery or want of authority as a defense.

40.

In case the bill is originally payable to bearer, the drawee may debit the drawers account
in spite of the forged indorsement. The reason is that:
a. the forged indorsement is necessary to the title of the holder.
b. the drawee can recover from the holder.
c. the forged indorsement is not necessary to the title of the holder. The drawee
cannot recover from the holder.
d. the drawee cannot recover from the holder since the forged indorsement is
necessary to the holder.

41.

X delivered a check issued by him and payable to the order of CASH to Y in payment for
certain obligations incurred by X in favor of Y. Y then delivered the check to Z in payment
for certain obligations. Which statement is most accurate?
a.
Z can encash the check even though Y did not indorse the check.
b.
Z cannot encash the check for lacking in proper endorsement.
c.
Y is the only one liable because he was the one who delivered the check to Z.
d.
The negotiation is not valid because the check is an instrument payable to order.

42.

Which
bearer
a.
b.
c.
d.

43.

The signature of X was forged as drawer of a check. The check was deposited
account of Y and when deposited was accepted by AAA Bank, the drawee
Subsequently, AAA Bank found out that the signature of X was actually forged.
statement is most accurate?
a.
The drawee bank can recover from Y, because the check was deposited
account.

b.
c.
d.
44.

phrase best completes the statement -- A check which is payable to bearer is a

instrument and:
negotiation can be made by delivery only;
negotiation must be by written indorsement;
negotiation must be by specific indorsement;
negotiation must be by indorsement and delivery.
in the
bank.
Which
in his

The drawee bank can recover from X, because he is the drawer even though
his signature was forged.
The drawee bank is estopped from denying the genuineness of the
signature of the X, the drawer of the check.
The drawee bank can recover from Y because as endorser he warrants the
genuineness of the signature

A promissory note which is undated is presumed to be

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a.
b.
c.
d.

dated as of the date of issue;

dated as of the date of the first indorsement;
promissory note is invalid because there is no date;
dated on due date.

45.

M makes a promissory note that states: "I, M, promise to pay Php5,000.00 to B or bearer.
Signed, M." M negotiated the note by delivery to B, B to N, and N to O. B had known that M
was bankrupt when M issued the note. Who would be liable to O?
a.
M and N since they may be assumed to know of M's bankruptcy
b.
N, being O's immediate negotiator of a bearer note
c.
B, M, and N, being indorsers by delivery of a bearer note
d.
B, having known of M's bankruptcy

46.

D, debtor of C, wrote a promissory note payable to the order of C. C's brother, M,

misrepresenting himself as Cs agent, obtained the note from D, then negotiated it to N
after forging C's signature. N indorsed it to E, who indorsed it to F, a holder in due course.
May F recover from E?
a.
No, since the forgery of C's signature results in the discharge of E.
b.
Yes, since only the forged signature is inoperative and E is bound as indorser.
c.
No, since the signature of C, the payee, was forged.
d.
Yes, since the signature of C is immaterial, he being the payee.

47.

M, the maker, issued a promissory note to P, the payee which states: "I, M, promise to pay
P or order the amount of Php1 Million. Signed, M." P negotiated the note by indorsement to
N, then N to O also by indorsement, and O to Q, again by indorsement. But before O
indorsed the note to Q, O's wife wrote the figure "2" on the note after "Php1" without O's
knowledge, making it appear that the note is for Php12 Million. For how much is O liable to
Q?
a.
Php1 Million since it is the original tenor of the note.
b.
Php1 Million since he warrants that the note is genuine and in all respects what it
purports to be.
c.
Php12 Million since he warrants his solvency and that he has a good title to the
note.
d.
Php12 Million since he warrants that the note is genuine and in all respects what it
purports to be.

48.

A promissory note states, on its face: "I, X, promise to pay Y the amount of Php 5,000.00
five days after completion of the on-going construction of my house. Signed, X." Is the note
negotiable?
a.
Yes, since it is payable at a fixed period after the occurrence of a specified event.
b.
No, since it is payable at a fixed period after the occurrence of an event which may
not happen.
c.
Yes, since it is payable at a fixed period or determinable future time.
d.
No, since it should be payable at a fixed period before the occurrence of a specified
event.

49.

Forgery of bills of exchange may be subdivided into, a) forgery of an indorsement on the

bill and b) forgery of the drawer's signature, which may either be with acceptance by the
drawee, or
a.
with acceptance but the bill is paid by the drawee.
b.
without acceptance but the bill is paid by the drawer.
c.
without acceptance but the bill is paid by the drawee.
d.
with acceptance but the bill is paid by the drawer.

50.

P authorized A to sign a bill of exchange in his (Ps) name. The bill reads: "Pay to B or order
the sum of Php1 million. Signed, A (for and in behalf of P)." The bill was drawn on P. B
indorsed the bill to C, C to D, and D to E. May E treat the bill as a promissory note?
a.
No, because the instrument is payable to order and has been indorsed several
times.
b.
Yes, because the drawer and drawee are one and the same person.
c.
No, because the instrument is a bill of exchange.
d.
Yes, because A was only an agent of P.

51.

Z wrote out an instrument that states: "Pay to X the amount of Php1 Million for collection
only. Signed, Z." X indorsed it to his creditor, Y, to whom he owed Php1 million. Y now
wants to collect and satisfy X's debt through the Php1 million on the check. May he validly
do so?
a.
Yes, since the indorsement to Y is for Php1 Million.
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b.
c.
d.

No, since Z is not a party to the loan between X and Y.

No, since X is merely an agent of Z, his only right being to collect.
Yes, since X owed Y Php1 Million.

52.

X issued a check in favor of his creditor, Y. It reads: " Pay to Y the amount of Seven
Thousand Hundred Pesos (Php700,000.00). Signed, X". What amount should be construed
as true in such a case?
a.
Php700,000.00.
b.
Php700.00.
c.
Php7,000.00.
d.
Php700,100.00.

53.

Which
a.
b.
c.
d.

54.

The following is not a condition for one to be considered a holder in due course:
a.
that he became the holder of it before it was overdue and with notice that it had
been previously dishonoured if such as the fact;
b.
that it is complete and regular upon its face;
c.
that he took it in good faith and for value;
d.
that at the time it was negotiated to him, he had no notice of any infirmity in the
instrument or defect in the title of the person negotiating it.

55.

X issued a promissory note which states, "I promise to pay Y or order Php100,000.00 or
one (1) unit Volvo Sedan." Which statement is most accurate?
a.
The promissory note is negotiable because the forms of payment are clearly stated.
b.
The promissory note is non-negotiable because the option as to which form of
payment is with the maker.
c.
The promissory note is an invalid instrument because there is more than one form
of payment.
d.
The promissory note can be negotiated by way of delivery.

56.

X issued a promissory note which states "I promise to pay Y or bearer the amount of
HK$50,000 on or before December 30, 2013." Is the promissory note negotiable?
a.
No, the promissory note becomes invalid because the amount is in foreign currency.
b.
Yes, the promissory note is negotiable even though the amount is stated in foreign
currency.
c.
No, the promissory note is not negotiable because the amount is in foreign
currency.
d.
Yes, the promissory note is negotiable because the Hong Kong dollar is a known
foreign currency in the Philippines.

57.

Gloria makes a promissory note for Three Million to the order of Benigno. To secure
benignos debt to Mar of Two million, he pledges the nore to Mar as a security.

of the following is true:

All holders for value are holders in due course
An immediate party can be a holder in due course
All remote parties are holders in due course
All holders in due are remote parties

Statement A: Mar may recover Three Million, holding the surplus One million for Benigno,
if the note matured.
Statement B: If Gloria has defense of failure of consideration against Benigno, Mar can
collect Two Million if he is a holder in due course.
a.
b.
c.
d.

Both statements are true.

Both statements are false.
Only statement A is true.
Only statement B is false.

58.

Forgery is the counterfeit-making or fraudulent alteration of writing and may consist in the
signing of anothers name or the alteration of an instrument in the name, amount,
description of the person and the like, with intent thereby to
a. defraud
b. dishonor
c. confound
d. alter

59.

Forgery is a real or absolute defense when

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a.
b.
c.
d.
e.

drawer is guilty of negligence

drawer whose signature was forged
drawees negligence
a&b
b&c

60.

A certificate of stock is not a negotiable instrument because it lacks the requirement of:
a. The instrument must be in writing and signed by the maker or drawer.
b. It must contain an unconditional promise or order to pay a sum certain in money.
c. It must be payable to bearer or order.
d. It must be payable on demand, or at fixed determinable future time.

61.

The date of the instrument is in blank. The ______ may fill the blank by writing the date
intended.
a. Payee
b. Drawee
c. Holder
d. Maker

62.

What acts are necessary to complete an instrument?

a. Mechanical act of writing, and delivery
b. Mechanical act of writing, or delivery
c. Mechanical act of writing, and issuing
d. Mechanical act of writing, or issuing

63.

In order that a person may have a prima facie authority to convert a signature on a blank
paper into a negotiable instrument and fill it up for any amount, the following must be
present. Except.
a. The blank paper bears the name of the payee
b. The blank paper bears the signature of the maker or drawer
c. It was delivered by the person making the signature
d. It was delivered in order that the paper may be converted into a negotiable
instrument

64.

When
a.
b.
c.
d.

65.

When an instrument is a mechanically incomplete but delivered instrument, any person

who becomes a party thereto after its completion shall be liable to:
a. A holder in due course
b. Any holder
c. Maker
d. Indorser

66.

It operates as a prima facie authority to fill up an instrument as such for any amount
a. Indorsement
b. Signature
c. Blank paper
d. Delivery

67.

An instrument Payable to Angel Locsin or order the sum of P1, 000. Signed X is:
a.
Non-negotiable
b.
A bearer instrument since it is an instrument payable to the order of a fictitious
person.
c.
Negotiable because it complies with the requisites of negotiability.
d.
A bearer instrument since the name of the payee does not purport to be the name
of any person.

68.

The negotiable character of an instrument otherwise negotiable is not affected when it

gives the _______ an election to require something to be done in lieu of payment in money.
a.
Holder
b.
Drawer
c.
Drawee

may blanks in the document be filled?

When an instrument is wanting in any material particulars
When an instrument is not delivered
When an instrument is negotiated
When an instrument is assigned

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d.

Maker

69.

Which
a.
b.
c.
d.

of the following is a negotiable instrument?

Bonds
Postal Money Order
Trust Receipt
Treasury Warrant

70.

This means the transfer of the possession of the instrument by the maker or drawer with
the intent to transfer title to the payee
a. Delivery
b. Issue
c. Assign
d. Transfer

71.

ABC signs a piece of paper and delivers it to XYZ with the intention of making the
instrument negotiable
a. XYZ can fill it up for any amount
b. XYZ has implied authority to complete it
c. A and B
d. None of the above

72.

It is the first delivery of the instrument complete in form to a person who takes it as a
holder
a. Assignment
b. Negotiation
c. Issuance
d. Indorsement

73.

A signature on a blank paper delivered by the person making the signature in order that
the paper may be converted into a negotiable instrument operates as a __________
authority to fill it up as such for any amount
a.
Absolute
b.
General
c.
Special
d.
Prima facie

74.

An instrument payable to ______ (blank) or order is:

a.
Negotiable since the holder may insert the name of the payee
b.
A bearer instrument because the name of the payee does not purport to be the
name of any person
c.
Negotiable since it can be proven by extrinsic evidence who the intended payee is
d.
Non-negotiable

75.

If the signature is so placed upon the instrument that it is not clear in what capacity the
person intended to sign, he is deemed :
a.
Not a party to the instrument
b.
A maker or a drawer
c.
Indorser
d.
Holder in due course

***************************************NOTHING FOLLOS************************************

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